Transcription
2013 ANNUAL REPORT TO SHAREHOLDERSA YEAROF GROWTH
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Letter to ShareholdersANNUAL REPORT TO SHAREHOLDERS2013: A YEAR OF GROWTHIn today’s hypercompetitive, global business economy, growth is a challenge forcompanies of all sizes, in all geographies and every industry. And technologies emergeevery day that disrupt the status quo and revolutionize the marketplace.To survive and grow within this challenging ecosystem, businesses must work harder than ever to staycompetitive. Operating efficiently is no longer enough. Companies must now rapidly exchange new ideas,innovate faster, reach new markets, increase sales and recruit more effectively in order to propel theirbusinesses forward and succeed. At the very core of each of these critical activities is collaboration.At PGi, we have dedicated the last 22 years to building collaboration solutions that help businesses growand thrive. This moment in time is exciting for us. We believe the market is moving towards next-generationcollaboration applications—like our own iMeet and GlobalMeet solutions—that leverage the cloud, socialplatforms, webcam video, video streaming, file sharing and mobile computing to deliver a more robust,productive and meaningful collaboration experience.1 Premiere Global Services, Inc. and/or its affiliates PGi. All trademarks of third parties referred to in this annual report are the property of their respective owners.
Letter to ShareholdersOur goal is for PGi to lead the collaboration industry through this evolution and into our exciting future.In 2013, we made solid progress toward our goal of positioning PGi as the largest pure play collaborationsoftware and services provider. For example, we: Generated nearly 75% growth in our collaboration software applications—approximately two-thirds ofwhich came from our current audio customers upgrading to PGi software; Completed three strategic acquisitions, adding thousands of enterprise customers, more than a quartermillion business users and new channels for growth; Released industry-leading innovations and enhancements to iMeet and GlobalMeet , resulting ingrowing accolades from industry analysts and media, as well as significant new enterprise sales; Served more than 45,000 enterprise customers, including 75% of the Fortune 100; and Hosted 70 million virtual meetings with over 300 million people.To continue to build on the great success we have generated in the market, we will focus on three importantareas in the year ahead: Educate. The value of our products extends well beyond business travel savings. We will continue to raiseawareness of the critical role collaboration plays in helping companies—from the world’s largest enterprisesto its smallest businesses—advance ideas, accelerate innovation, improve productivity and drive businessresults. PGi App Downloads. To fully deliver on the promise of empowering customers with a collaborativeadvantage, it is critical that we continue migrating users from traditional landline telephones to our robustsuite of software applications for their computers, smartphones or tablets. Invest in Growth. We will invest more than ever in expanding our SaaS product suite and capabilities tocompete in significant new growth markets, such as webinars, web streaming, team workspaces and mobileapps. We will also invest in advertising, sales and marketing programs to grow brand awareness, adoptionand new market penetration.2 Premiere Global Services, Inc. and/or its affiliates PGi. All trademarks of third parties referred to in this annual report are the property of their respective owners.
Letter to ShareholdersThe Global Collaboration MarketMARKET TOTALS IN BILLIONS 19.0 16.6 14.5Enterprise Social Software 12.6UCaaS 11.0Webcasting / WebstreamingAudio & Web Conferencing20132014201520162017Wainhouse Research LLC, 2013 Audio Conferencing Services Market Sizing & 5-Year Forecast. July 2013.Wainhouse Research LLC, 2013 Worldwide Web Conferencing Services Market Size & 5-Year Forecast. August 2013Wainhouse Research LLC, 2013 Enterprise Streaming Solutions Market Sizing & 5-Year Forecast. October 2013.Wainhouse Research LLC, 2013 Enterprise Webcasting Services Market Sizing and 5-Year Forecast. August 2013.Wainhouse Research LLC, 2013 Worldwide Unified Communication as a Service Market Sizing & 5-Year Forecast. October 2013Gartner Inc, Magic Quadrant for Social Software in the Workplace. September 2013.As we look ahead into 2014 and beyond, we continue to be excited by PGi’s opportunities for growth andleadership in today’s evolving global marketplace. We believe that PGi will deliver on our visionary promiseof providing collaboration solutions to the world, founded firmly on our success in 2013 and our ongoingstrategic initiatives this year.Thank you, our valued shareholders, customers and PGi associates, for your continued commitment to ourcompany’s success. You honor us with your confidence, support and trust.Sincerely,Boland T. JonesFOUNDER, CHAIRMAN & CEO3 Premiere Global Services, Inc. and/or its affiliates PGi. All trademarks of third parties referred to in this annual report are the property of their respective owners.
Collaborative AdvantageA DAY IN THE LIFE:THE POWER OF PGi’sCOLLABORATIVE ADVANTAGEThis year, our customers reinforced the growing market perception that “work” is nolonger a place. Eighty percent of our surveyed respondents said they are allowedto work outside the office.* This “anywhere work” revolution is changing the face ofbusiness, and it is being powered by—and, in turn, driving the growing adoption of—collaboration technologies.Workers everywhere are now taking the business of work with them wherever they go, and successfulbusinesses are empowering their teams with PGi collaboration solutions to: Advance ideasAccelerate innovationImprove productivityBuild relationshipsIncrease salesDrive business growthIt’s what we call our “collaborative advantage,” and here are examples of how businesses use our vity-According-to-PGi-Survey4 Premiere Global Services, Inc. and/or its affiliates PGi. All trademarks of third parties referred to in this annual report are the property of their respective owners.
A Day In The LifeThe Account ExecutiveEthan’s busy schedule means he’s constantly on the go, negotiating deals and buildingcustomer relationships for his global company. Whether he’s catching a flight to Beijingor coaching his son’s little league team, Ethan must be instantly available to his clients,colleagues and sales management.5 Premiere Global Services, Inc. and/or its affiliates PGi. All trademarks of third parties referred to in this annual report are the property of their respective owners.
A Day In The LifeBefore heading out to the office, Ethangrabs a cup of coffee and sits down at thekitchen table to touch base with his team.iMeet helps remote workers transforminto virtual teams, empowering themwith face-to-face meetings for pipelinecollaboration and best-practices support.Ethan’s clients have technical questions thathe can’t answer. So, he uses iMeet to bringhis product manager and sales engineer tothe client meeting remotely. Their expertisehelps him shorten the sales cycle and closethe deal faster.While waiting at the airport for his flightto Frankfurt, Ethan makes efficient use ofhis downtime to stream a recorded salestraining presentation using on-demandiMeet Meeting Minutes functionality.6 Premiere Global Services, Inc. and/or its affiliates PGi. All trademarks of third parties referred to in this annual report are the property of their respective owners.
A Day In The LifeThe Finance DirectorCaroline works at her global corporate headquarters, but her team is located in officesall over the world. Whether she’s joining a conference call to go over forecast dataor collaborating on spreadsheets with coworkers on different continents, she needscollaboration solutions that give her the tools to manage a globally dispersed operation.7 Premiere Global Services, Inc. and/or its affiliates PGi. All trademarks of third parties referred to in this annual report are the property of their respective owners.
A Day In The LifeCollaborating in different time zones meansthat business happens morning, noon andnight. GlobalMeet lets Caroline multitask by connecting her with Europeancolleagues while she sits in the parkingdeck wrapping up her call.Caroline needs to quickly and efficientlycollaborate with her team on the quarterlyfinancial statements. GlobalMeet screensharing makes it easy for her to bringeveryone together to work collaborativelyon documents and share results, regardlessof location or device.Attending a compliance webinar afterhours with GlobalMeet makes it possiblefor her to stay up-to-date on the latestaudit issues, and earn ContinuingProfessional Education (CPE) credits whileshe’s waiting for dinner to finish.8 Premiere Global Services, Inc. and/or its affiliates PGi. All trademarks of third parties referred to in this annual report are the property of their respective owners.
A Day In The LifeThe Freelance ConsultantIsaac doesn’t go to an office. In fact, Isaac doesn’t have an office. He works from home,from the coffee shop, from the train—wherever his busy life takes him. iMeet helpshim connect face-to-face with his clients in Atlanta, while enjoying his creative freedomin Seattle.9 Premiere Global Services, Inc. and/or its affiliates PGi. All trademarks of third parties referred to in this annual report are the property of their respective owners.
A Day In The LifeWith his tablet on and headphonesplugged in, PGi mobile apps make itpossible for Isaac to join meetings whereverhe is, even at the local coffee shop. Andwith iMeet , he can share documents, viewcontact information and see the people heis meeting with video.Isaac needs his presentations to count, sohe can win new clients and convince themthat his idea is THE idea. iMeet makes hisclient pitches powerful because he canplay video clips, share wireframes anddevelop concepts directly inside the onlinemeeting.Freelancers like Isaac get their work donewhenever creativity strikes. iMeet’s cloudfile cabinet makes it possible for Isaac toupload presentations too big for emaildirectly into his client’s iMeet room,anytime and anywhere—even when he’s athome on the sofa.10 Premiere Global Services, Inc. and/or its affiliates PGi. All trademarks of third parties referred to in this annual report are the property of their respective owners.
The Greater GoodTHE GREATER GOODWe are proud to dedicate another year to advancing the cause of social good in ourlocal communities all over the world.We believe corporate social good is pivotal to the health of our associates, ourcommunities and our customers. Through volunteer opportunities, charitable givingand social outreach, we impact the communities we touch in positive ways.In 2013, alongside numerous corporate and employee giving and volunteer projects, we were delighted toexpand our relationship with Junior Achievement through the Atlanta JA BizTown project. This state-of-theart interactive simulation provides sixth grade students with the opportunity to not only learn about financesand careers, but to one day transform into adults who are the sole decision makers and owners of theirpersonal financial success.11 Premiere Global Services, Inc. and/or its affiliates PGi. All trademarks of third parties referred to in this annual report are the property of their respective owners.
Financial Highlights2013 FINANCIAL HIGHLIGHTS2013 Accomplishments Grew revenue from PGi SaaS products nearly 75%; Exited the year with an annual revenue run-rate of approximately 40 million from PGi SaaS products; Named a Top 10 Innovative Technology Company in Georgia by the Technology Association of Georgia(TAG); Acquired ACT Teleconferencing, Inc., a global provider of integrated conferencing solutions withoperations in eight countries in North America, Europe and Asia Pacific; Acquired Via-Vox Limited, operating under the name Powwownow, one of Europe’s fastest growingconferencing providers focused on small and midsize businesses; Increased the borrowing capacity, extended the term and improved the pricing and covenants of our creditfacility, providing additional flexibility to execute our strategic growth plans, while also lowering our cost ofcapital; and Announced a multi-year strategic alliance with TeliaSonera, a leading provider of network access andtelecommunication services in the Nordic and Baltic countries, to bring PGi’s virtual meeting solutions toTeliaSonera’s business and consumer customers in these regions.12 Premiere Global Services, Inc. and/or its affiliates PGi. All trademarks of third parties referred to in this annual report are the property of their respective owners.
Financial HighlightsFree Cash Flow Per Share (3)(*)Number of MeetingsIN MILLIONS70.0 0.9462.2 0.7948.1 0.5739.931.7 0.26200920102011201220132010201120122013PGi Financial Results HighlightsIN THOUSANDS, EXCEPT PER SHARE DATA20132012Growth 526,865 505,2814.3%GAAP operating income34,73741,426-16.1%Non-GAAP operating income (1)58,76657,3272.5%GAAP diluted EPS from continuing operations0.400.58-31.0%Non-GAAP diluted EPS from continuing operations (1) ( 2 )0.780.736.8% 75,676 70,5217.3%Net revenuesNet cash provided by operating activities fromcontinuing operationsPlease see the table included in this annual report for the calculation and reconciliation of these non-GAAP financial measures to the most directly comparable GAAPmeasures.13 Premiere Global Services, Inc. and/or its affiliates PGi. All trademarks of third parties referred to in this annual report are the property of their respective owners.
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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-K[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2013[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from toCommission file number: 001-13577PREMIERE GLOBAL SERVICES, INC.(Exact name of registrant as specified in its charter)Georgia(State or other jurisdiction of incorporation or organization)59-3074176(I.R.S. Employer Identification No.)3280 Peachtree Road, N.E., The Terminus Building, Suite 1000, Atlanta, Georgia 30305(Address of Principal Executive Office)Registrant’s telephone number, including area code: (404) 262-8400Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, Par Value 0.01 Per ShareNew York Stock ExchangeSecurities registered pursuant to Section 12(g) of the Act: None(Title of class)Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.[ ] Yes [ ] NoIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.[ ] Yes [ ] NoIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),and (2) has been subject to such filing requirements for the past 90 days. Yes [ ] No [ ]Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every InteractiveData File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding12 months (or for such shorter period that the registrant was required to submit and post such files).Yes [ ] No [ ]Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is notcontained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporatedby reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smallerreporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 ofthe Exchange Act (Check one):Large accelerated filer [ ]Accelerated filer [ ]Non-accelerated filer [ ]Smaller reporting company [ ](Do not check if a smaller reporting company)Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).Yes [ ] No [ ]The aggregate market value of the voting and non-voting common equity held by nonaffiliates computed by reference to the priceat which the common equity was last sold, or the average bid and asked price of such common equity, as of June 28, 2013 as reportedby the New York Stock Exchange was 529,785,746.As of March 11, 2014, 48,219,344 shares of the registrant's common stock were outstanding.DOCUMENTS INCORPORATED BY REFERENCEPortions of the registrant’s proxy statement for its 2014 annual meeting of shareholders are incorporated by reference in Part III ofthis Form 10-K.
FORWARD-LOOKING STATEMENTSWhen used in this annual report on Form 10-K and elsewhere by us or by management from time to time, the words“believes,” “anticipates,” “expects,” “will,” “may,” “should,” “intends,” “plans,” “estimates,” “predicts,” “potential,” “continue”and similar expressions are intended to identify forward-looking statements concerning our operations, economic performanceand financial condition. For those statements, we claim the protection of the safe harbor for forward-looking statements containedin the Private Securities Litigation Reform Act of 1995. These statements are based on a number of assumptions and estimatesthat are inherently subject to significant risks and uncertainties, many of which are beyond our control and reflect future businessdecisions which are subject to change. A variety of factors could cause actual results to differ materially from those anticipated inour forward-looking statements, including, but not limited to, the following factors: Competitive pressures, including pricing pressures; Technological changes and the development of alternatives to our services; Market acceptance of our software-as-a-service, or SaaS, solutions, including our iMeet and GlobalMeet solutions; Our ability to attract new customers and to retain and further penetrate our existing customers; Our ability to establish and maintain strategic reseller and distribution relationships; Risks associated with challenging global economic conditions; Price increases from our telecommunications service providers; Service interruptions and network downtime, including undetected errors or defects in our software; Technological obsolescence and our ability to upgrade our equipment or increase our network capacity; Concerns regarding the security and privacy of our customers' confidential information; Future write-downs of goodwill or other intangible assets; Greater than anticipated tax and regulatory liabilities; Restructuring and cost reduction initiatives and the market reaction thereto; Our level of indebtedness; Risks associated with acquisitions and divestitures; Indemnification claims from the sale of our PGiSend business; Our ability to protect our intellectual property rights, including possible adverse results of litigation or infringementclaims; Regulatory or legislative changes, including further government regulations applicable to traditiona
collaboration applications—like our own iMeet and GlobalMeet solutions—that leverage the cloud, social platforms, webcam video, video streaming, file sharing and mobile computing to deliver a more ro
